Trai junks proposal to make WhatsApp, Viber, Skype paid

Users of WhatsApp, Viber, Skype and other apps won't have to shell out any extra charges as Trai has decided against the proposal.

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Users of WhatsApp, Viber, Skype and other apps won't have to shell out any extra charges as the telecom regulator has decided against a proposal of carriers to make companies that offer these popular services share part of their revenue with them or the government.

The Telecom Regulatory Authority of India (Trai) has also shelved plans to initiate a consultation process as it feels that operators are able to offset their losses through growth in data revenue, people familiar with the matter told ET. The industry had estimated a minimum annual loss of Rs 5,000 crore due to subscribers opting for free messenger services and voice over internet calls. "One-third of the incremental revenue of the telecom industry is coming from data services itself. As far as the voice services are concerned, there is an upswing in the realisation rates," one of the Trai officials told ET, explaining the rationale for not intervening for now.

"There is no proposal for a consultation paper (on regulating companies offering free messaging and calling services)," he added.

Indian mobile phone service providers, that have invested billions of dollars in creating networks, want over-the-top-players (OTTPs) to be regulated so that both parties operate on a level playing field. OTTPs are all apps that users download onto their mobile devices. Telcos have a problem with those that provide free messaging and voice calls over the internet such as WhatsApp, Viber and Skype. Many subscribers use these apps rather than their telecom operator's normal voice call and SMS services, eating into a carrier's revenue.

Operators want the OTTPs — which use their telecom networks — to pay all the fees that carriers pay to the government, which in turn will force the app makers to charge for what is currently free, bringing them on par with telcos.

OTT players, however, say that any move to regulate and seek payment — either to the government or to the carriers — is against the concept of free internet or "net neutrality".

A top executive at an app maker said that if OTTPs "were forced to pay, in all probability the cost would be passed on to the users." Trai recently held a seminar, bringing several OTT players faceto-face with operators, setting off speculation that this was a precursor to regulating the app space in India.

"We do understand that there is some (revenue) erosion there. For instance, our data confirms that the number of SMSes per person per month have fallen from 27 two years ago to about 17," a second senior official said.

However, he said that SMS continues to be a minuscule part of an operator's overall revenue. For example, SMS and value-added services contributed 5.5% of Bharti Airtel's mobile revenue, down from 8.3% a year earlier. Data revenue, on the other hand, grew to 12.4% from 8.2%. "Riding for free on our network puts a certain amount of strain on our network. That has to be admitted," said Rajat Mukerjee, chief corporate Affairs Officer at Idea Cellular, India's No. 3 carrier.

"With that background, this particular discussion needs to be fair and frank, from the fair and frank, from the standpoint of providing equal competition."

In a recent presentation to Trai, an Indian telecom major estimated that the industry loses close to Rs 5,000 crore in revenue annually due to the free voice and SMS services offered by OTT players. Over the past four quarters, the industry has lost close to 42% of SMS revenue and 19% of voice revenue to OTTPs. Rajan Mathews, director general of the Cellular Operators Association of India, the GSM industry body, told ET that the loss for telcos could "balloon five times, or to some Rs 24,000 crore, in the next three years if OTTPs aren't brought under regulation."

Viber's founder and chief executive officer Talmon Marco said that any demand for payment on OTTPs would amount to censorship.